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Shuttle Diplomacy

Driving ambition: Last month, many SuperShuttle drivers left the company and formed a competitor.
Mark A. Manger

They're portraying it as a classic David and Goliath match-up: the little guys who drive people to the airport for a living versus the big corporation they once worked for.

But the former SuperShuttle drivers who broke off from the shuttle giant and started their own service are proving to be just as tenacious as their competitor in the battle for your bucks.

When SuperShuttle International, a Phoenix-based company with operations in seventeen American and Canadian cities, purchased the Denver SuperShuttle franchise from Yellow Transportation in December 2000, its 67 drivers -- all independent contractors who owned their own vans -- anticipated entering a new contract with SuperShuttle International. They even formed their own corporation, Owner/Driver United, so that they'd have "a unified position to negotiate the contract," says O/DU president Daniel Cook. (Because the drivers were independent contractors rather than employees, he explains, they couldn't form a union and instead set up a corporation.)

After SuperShuttle managers informed the drivers that the company now wanted them to become franchise owners, the drivers became even more wary. But before they got a chance to negotiate any terms of the deal, the drivers received a letter from SuperShuttle dated July 17, informing them that they'd all be terminated as of August 6 -- because they couldn't sign a franchise agreement without first being released from their old contract.

The timing was a shock. "Our deadline for signing the agreement was eleven days prior to the most important convention ever for the city," says former SuperShuttle driver Howard Davey. The American Society of Association Executives convention, scheduled to begin August 17, would bring hundreds of meeting planners to Denver.

The drivers finally got a look at the franchise agreement on July 26. Under the old contract, they'd turned over 38 percent of their revenue to SuperShuttle, but the company had provided all of the vans' communication equipment. "Under the unit franchise agreement, that percentage remained the same, but their expenses shifted to our side," Cook says. As franchise owners, the drivers claim, they'd not only have to pay for their own radio-dispatch equipment and paging service, but also their own liability and comprehensive insurance.

And the contract was so open-ended, they worried that even more costs could come their way. "There's a SuperShuttle counter at DIA that costs $81,000 a year," Cook points out. "With such ambiguous terms, it was possible that they'd add that cost on to us and any other costs down the road."

Not true, responds Dave Bird, SuperShuttle's senior vice president of operations. "They weren't going to have to take on any equipment costs," he says. "A lot of those people wouldn't talk to us; they just got mad. And so there's still confusion over that document. I'm confident that if they had talked to us about it, they would have seen that it's the same economic package."

The franchise agreement was designed to make the company's business practices more consistent, Bird continues. For example, not all drivers adhere to the same dress code, maintain their vehicles in the same way or follow the same insurance policies. The agreement would have benefited both sides by "clearly stating the expectations the company would have of the drivers and the expectations the drivers would have of the company."

The drivers wanted to negotiate the terms of the franchise agreement as a group, but SuperShuttle refused, Cook says: "They said they wouldn't change one paragraph, one sentence, nothing." (According to Bird, franchise law doesn't allow companies to negotiate with more than one person at a time.)

Sixty-six of SuperShuttle's 67 Denver drivers refused to sign the franchise agreement, and 52 left the company to form a competitor, Blue Sky Shuttle. Three more formed another shuttle company, Flying Eagle Express.

Before either Blue Sky or Flying Eagle could start driving travelers to and from the airport, they needed to get permission from the Colorado Public Utilities Commission, which regulates shuttle services. Because SuperShuttle had suddenly lost almost its entire Denver fleet, drivers with the two new services, as well as those with Wolf Express, a much smaller shuttle company that now wanted to expand its territory -- applied to the PUC for emergency authority, which allows a company to operate for thirty days.

"We had never entertained any idea of forming our own company and competing with SuperShuttle," Cook says. "But the public had no carrier available to them, so we had to submit an emergency application to the PUC."

PUC granted Blue Sky's application. "We started a new shuttle service, leased an office location, leased radios and got our vans hacked up in a matter of days," recalls Blue Sky driver Jim Anaya. In addition to returning their communication equipment to SuperShuttle, the drivers also had to repaint their vans to reflect their new name.

SuperShuttle, meanwhile, scrambled to bring in drivers from out of state so that it wouldn't lose business.

After the ASAE convention passed with few transportation-related glitches, Blue Sky Shuttle applied for, and received, temporary authority from the PUC to provide service for another six months. That's when the competition started getting fierce.

"There's been a concerted effort on the part of SuperShuttle to make sure we don't succeed," Davey says. He claims SuperShuttle has been badmouthing Blue Sky to Denver hotels and that downtown hotels are turning away Blue Sky's vans as a result. "Hotel managers have been coming outside and telling our drivers to get off their property," he continues. "How are we supposed to pick people up at the Adam's Mark? Do we go stand out on Court Place and wave to people? Do we drop people off on the corner and make them walk to the hotel with their luggage?"

Adds Anaya: "This is a matter of dollars and cents. SuperShuttle knows what they risk in losing this business, and they'll do whatever they can to keep a handle on it."

But SuperShuttle denies playing dirty. "Certain hotels, without our goading, have said they don't need another shuttle service," says Robert Tschupp, vice president and general manager of SuperShuttle's Denver arm. "A hotel driveway is private property, and if hotel managers want to turn Blue Sky away, that's their right, but we haven't told them to keep Blue Sky out."

Andre van Hall, general manager of the Denver Adam's Mark Hotel, says SuperShuttle never asked him to turn away Blue Sky. "They're coming through my hotel the same way SuperShuttle is," he says of Blue Sky's drivers. "Both sides, and particularly Blue Sky, are trying to get us in the middle of this battle. They're sending me all kinds of memos and e-mails saying how they were discriminated against.

"They want me to write letters to the PUC explaining how necessary they are for Denver and how unfairly they've been treated by SuperShuttle," he continues. "I'm not going to get caught in the middle. If they have battles internally, they need to resolve them internally. All I care about is that my guests don't get harassed and that they have transportation to and from the hotel and airport."

Van Hall did send a letter in support of SuperShuttle to the PUC in August, however; the shuttle company convinced several other hotels, as well as the Colorado Hotel and Lodging Association and the Denver Metro Convention and Visitors Bureau, to do the same.

"My relationship with Blue Sky has been very favorable, and so has my relationship with SuperShuttle," says Alicia Wiley, who manages the Brown Palace and Comfort Inn complex. "I have no reason to turn either of them away. The only reason I'd turn a shuttle company away is if they gave poor service to my guests, and that has not been the case with either one."

SuperShuttle's business is almost back to normal; over the past few weeks the company has built up its fleet to 55 vans. The drivers of those vans are all in the process of signing franchise agreements. (In all but two of the cities where SuperShuttle offers service -- Tampa and Phoenix -- the drivers operate as franchisees.)

Blue Sky is so worried about SuperShuttle's comeback that the drivers will resort to any tactic to gain an edge in the market, Bird claims. "The drivers have been throwing a lot of stuff at us," he says. "They went to the PUC and said we were doing all these illegal things, like hiring drivers who didn't have the proper license and using drivers with out-of-state license plates, so we went down to the PUC and addressed all of those things to the PUC's satisfaction."

But another front in the fight may open soon -- in a courtroom. Blue Sky drivers claim that their original SuperShuttle contract called for the company to provide liability insurance. Right after September 11, 2001, though, the drivers received a memo stating that they were now responsible for paying for their own insurance, which amounted to $60 a week per driver.

Tschupp explains that after SuperShuttle's sale, the company covered insurance costs for several months to give the drivers time to transition from their former arrangement with Yellow Transportation. "We felt that by September 2001, the drivers were far enough along to absorb all of the costs," he says.

But that answer doesn't satisfy the drivers, who are considering suing SuperShuttle for breach of their old contract.

In the meantime, they're going ahead with plans for their new company. Blue Sky Shuttle has applied to the PUC for permanent authority -- a process that involves a public hearing in late October. And while neither Wolf Express nor Flying Eagle Express was granted temporary authority by the PUC because they were unable to demonstrate an immediate and urgent need for their services, both companies have submitted applications for permanent authority. According to PUC spokesman Terry Bote, their requests will probably be heard at the same time as Blue Sky's.

In order to secure permanent authority from the PUC, the applicants will not only have to show that there's a public need for their services, but they'll also need to prove that the existing service -- SuperShuttle -- is substantially inadequate.

Which means the PUC will have to sort through all the claims and counterclaims, and somehow arrive at the correct conclusion. That won't be easy, given the confusion caused by the current competition.

"There's my story, and there's Blue Sky's story," concedes SuperShuttle's Bird, "and somewhere in the middle is the truth."


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